Kenneth Harold Bull, M.D.; Decision and Order, 62666-62676 [2013-24695]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62666-62676]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24695]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 11-22]


Kenneth Harold Bull, M.D.; Decision and Order

    On December 14, 2010, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Kenneth Harold Bull, M.D. (Respondent), of Albuquerque, 
New Mexico. ALJ Ex. 1. The Show Cause Order proposed the revocation of 
Respondent's DEA Certificate of Registration, which authorizes him to 
dispense controlled substances in schedules II through V as a 
practitioner, on the ground that because of actions taken by the New 
Mexico Medical Board, Respondent was without authority to handle 
controlled substances in New Mexico, the State in which he holds his 
DEA registration. Id.; see also 21 U.S.C. 824(a)(3).
    Respondent timely requested a hearing. ALJ Ex. 2. The matter was 
placed on the docket of the DEA Office of Administrative Law Judges 
(ALJ) and assigned to ALJ Wing, who, on January 19, 2011, issued an 
Order for Prehearing Statements. ALJ Ex. 3. The next day, the 
Government moved to stay the proceeding and for summary disposition; 
its motion was based on the New Mexico Medical Board's (hereinafter, 
Board) issuance, on October 1, 2010, of an order which summarily 
suspended Respondent's state medical license ``[u]ntil further [o]rder 
of the Board.'' ALJ Ex. 4 (Appendix A).
    On January 25, 2011, Respondent opposed the motion, arguing that 
the Board's hearing was scheduled for February 11, 2011 and that the 
Government ``will not be prejudiced by this short delay.'' ALJ Ex. 5. 
On February 9, 2011, the ALJ issued his ruling on the motion, 
``conclud[ing] that further delay in ruling on the Government's motion 
for summary disposition is not warranted.'' ALJ Ex. 6, at 4. Because 
Respondent did not dispute that he ``is presently without state 
authority to handle controlled substances,'' the ALJ granted the 
Government's motion and recommended that his registration be revoked. 
Id. at 4-5. On March 18, 2011,

[[Page 62667]]

the ALJ forwarded the record to this Office for Final Agency Action. 
ALJ Ex. 7.
    On May 9, 2011, the State Board issued an order, which authorizes 
Respondent to ``continue to practice medicine in psychiatry,'' but 
prohibits him ``from treating patients with chronic pain.'' ALJ Ex. 8 
(Appendix A, at 13). The State order also prohibits him from 
``prescrib[ing] narcotics, including but not limited to, all opioid 
analgesics, including buprenorphine and all synthetic opioid 
analgesics.'' Id.
    Because the sole basis for the issuance of a final order was no 
longer in existence, on May 26, 2011, the Government filed with my 
Office an unopposed motion to remand. ALJ Ex. 8, at 2, 4. Therein, the 
Government stated that it ``intends to seek to amend the current Order 
to Show Cause and will seek the revocation of the Respondent's DEA 
Certificate of Registration on the basis that the Respondent's 
registration is inconsistent with the public interest.'' Id. at 2. The 
Government also stated that it ``will allege that the DEA investigation 
revealed that the Respondent would ask his patients to return their 
unused drugs, which included controlled substances, and that the 
Respondent would re-distribute these drugs to other patients as 
samples.'' Id. at 2-3. The Government also stated that ``Respondent 
told the DEA that he did not maintain a log of the returned drugs, . . 
. that he had no record-keeping for this illegal activity, that he did 
not keep any drug inventories, and that he did not keep a dispensing 
record of the re-dispensed drugs given to his other patients.'' Id. at 
3. On June 28, 2011, I issued an order granting the Government's 
motion. ALJ Ex. 9.
    Thereafter, additional prehearing procedures were conducted during 
which both parties submitted prehearing statements; the Government also 
submitted a supplemental prehearing statement. The Government did not, 
however, file an amended show cause order.
    In its Prehearing Statement, the Government stated the issues as: 
(1) ``[w]hether the DEA should revoke the registration of [Respondent], 
pursuant to 21 U.S.C. 824(a)(4) and 823(f), and deny any pending 
applications for renewal or modification of such registration, pursuant 
to 21 U.S.C. 823(f),'' and (2) ``[w]hether the DEA should revoke the 
registration of the Respondent pursuant to 21 U.S.C. 824(a)(3) and deny 
any pending applications for renewal or modification of the 
registration, pursuant to 21 U.S.C. 823(f), based on the Respondent's 
restricted/limited state authority to practice medicine or handle 
controlled substances in the State of New Mexico, the state in which 
the Respondent is registered with the DEA.'' ALJ Ex. 11, at 2.
    In its Prehearing Statement, the Government further discussed the 
proposed testimony of two witnesses, an Agency Investigator 
(hereinafter, DI) and Respondent. Id. at 3. With respect to the DI, the 
Government stated that she would ``testify that the DEA investigation 
revealed that the Respondent would ask his patients to return their 
unused drugs, which included controlled substances, and that the 
Respondent would re-distribute these drugs to his other patients as 
samples.'' Id. at 3-4. The Government also stated that the DI would 
testify that ``Respondent told the DEA that he did not maintain a log 
of the returned drugs, that he did not pay his patients for the 
returned drugs, that he had no record-keeping for this illegal 
activity, that he did not keep any drug inventories, and that he did 
not keep a dispensing record of the re-dispensed drugs that he gave to 
his other patients.'' Id. at 4. Moreover, the Government stated that 
the DI would testify that Respondent ``told the DEA that he received 
samples from pharmaceutical companies[,] which included controlled 
substances[,] but that he did not keep invoices of the controlled 
substance samples that he received.'' Id. at 4-5.
    With respect to the second issue, the Government stated that the DI 
would testify that the State Board ``issued a Decision and Order dated 
May 9, 2011 which reinstated the Respondent's license to practice 
medicine and state authority to handle controlled substances for an 
indefinite term of probation which includes terms, conditions, and 
restrictions imposed by the Board.'' Id. at 6. The Government also 
stated that the DI would testify that on August 15, 2011, the Board 
issued an Amended Decision and Order, which stated that Respondent 
``may not prescribe narcotics, including but not limited to, all opioid 
analgesics, including buprenorphine and all synthetic opioid 
analgesics, as defined by the [New Mexico] Controlled Substances Act.'' 
Id. The Government then contended that ``Respondent currently has 
limited/restricted state authority to handle controlled substances in 
the State of New Mexico, the state in which the Respondent is 
registered with the DEA'' and that his ``registration is not a 
restricted registration and includes the authority to handle all 
controlled substances in Schedules II through V which is different from 
and inconsistent with the Respondent's limited/restricted state 
authority to handle controlled substances.'' Id.\1\
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    \1\ The Government also stated that the DI would testify as to 
the inventory of various controlled substances which were found at 
Respondent's office during a November 16, 2009 inspection. ALJ Ex. 
11, at 6-8.
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    As for Respondent's proposed testimony, the Government stated that 
Respondent would testify ``he is currently on an indefinite term of 
probation with the Board which included terms, conditions, and 
restrictions,'' and ``that he is not authorized by the State of New 
Mexico to handle all controlled substances in Schedules II through V.'' 
Id. at 9. The Government also stated that Respondent would ``testify 
that he asked his patients to return their unused drugs which included 
controlled substances and that he would re-distribute these drugs to 
his other patients as samples.'' Id. Finally, the Government stated 
that Respondent would ``testify that he did not maintain any log for 
the returned drugs, that he did not pay the patients for the returned 
drugs, that he had no record-keeping for this illegal activity, that he 
did not keep any drug inventories, and that he did not keep a 
dispensing record of the re-dispensed drugs given to his other 
patients.'' Id.
    In its Supplemental Prehearing Statement, the Government provided 
notice that it also intended to elicit testimony from a former State 
Drug Inspector (hereinafter, SDI) for the New Mexico State Board of 
Pharmacy. ALJ Ex. 14, at 3. The Government stated that the SDI would 
testify regarding a complaint the Pharmacy Board received alleging that 
Respondent would take ``returned medications from patients and re-
dispens[e] these same medications to different patients,'' and that on 
November 16, 2009, he accompanied DEA DIs on an inspection of 
Respondent's office. Id. The Government also stated that the SDI would 
``testify that [Respondent] told him that he received returned 
medications from patients and re-dispensed these medications to 
different patients, that he kept no records of these transactions, and 
that he denied using any of the controlled substances himself.'' Id. In 
addition, the Government stated that Respondent ``admitted that he kept 
medication samples in his medical office which he dispensed to his 
patients and that he dispensed samples of Lyrica, Lunesta, and Ambien 
without the annual inventory required by state law and without a 
biennial inventory required by federal law and that [Respondent] 
admitted that he did not know that

[[Page 62668]]

these medication samples were controlled substances.'' Id.
    Finally, in its Supplemental Prehearing Statement, the Government 
noted that the DI would testify that during the November 16, 2009 
inspection, nine empty prescription vials were seized. Id. at 4. The 
Government further stated that the DI would testify ``that the seized 
controlled substances were not only prescribed by [Respondent] but were 
prescribed by several . . . physicians.'' Id.
    On November 15, 2011, the ALJ conducted a hearing in Tucson, 
Arizona, at which both parties elicited testimony and submitted 
documentary evidence. ALJ Recommended Decision (hereinafter R.D.), at 
5. Thereafter, both parties filed briefs containing their proposed 
factual findings, legal conclusions and argument. Id.
    On January 6, 2012, the ALJ issued his R.D. Id. at 1. Therein, the 
ALJ made findings with respect to each of the five public interest 
factors. See 21 U.S.C. 823(f). With respect to factor one--the 
recommendation of the state licensing board--the ALJ noted that the 
State Board had placed Respondent on probation based on ``findings 
pertaining to both Respondent's prescribing practices, as well as his 
record-keeping practices.'' R.D. at 16. While noting that ``Respondent 
is not entirely precluded from prescribing controlled substances in New 
Mexico,'' the ALJ reasoned that ``the detailed findings and opinions 
contained within the Medical Board's order are consistent with the 
evidence of record, and weigh in favor of a finding that Respondent's 
continued registration would be inconsistent with the public 
interest.'' Id. at 17. (citation omitted).
    With respect to factors two and four--Respondent's experience in 
dispensing controlled substances and compliance with applicable laws 
related to controlled substances--the ALJ first addressed the 
Government's argument that Respondent ``improperly act[ed] as a 
pharmacist without a DEA registration . . . by retrieving controlled 
substances from patients and re-distributing them to other patients.'' 
Id. at 18. The ALJ rejected the Government's contention, finding that 
while ``Respondent admitted that he retrieved controlled substances 
that had already been dispensed to patients, the Government failed to 
prove by a preponderance of the evidence that Respondent re-distributed 
those controlled substances to other patients.'' Id. at 19.
    Next, the ALJ addressed whether Respondent violated federal and 
state record-keeping requirements. Id. at 19-22. The ALJ specifically 
found ``that Respondent did not maintain a log of the controlled 
substances that he retrieved from patients,'' that he did not 
``maintain any records pertaining to the controlled substance samples 
that he received from the pharmaceutical companies,'' and ``failed to 
keep any drug inventories or dispensing records for the controlled 
substances that he had on hand or that he dispensed to patients.'' Id. 
at 21. The ALJ also found Respondent's testimony that he documented his 
dispensing of medication in the patient charts to not be credible, 
noting the DI's testimony that he ``never provided the patient 
charts,'' that he ``claimed to maintain these records in the patient 
charts [only] after she informed him that he was in violation of . . . 
federal regulations,'' and that Respondent ``testified that he was 
unaware of his obligations to maintain records under state and federal 
law.'' Id. Finally, the ALJ found that Respondent did not maintain any 
records of either his receipt or dispensing of Suboxone and Subutex, 
and again noted that Respondent provided incredible testimony that he 
documented the dispensings in the patient charts and ``would have shown 
the . . . charts to the DIs or [SDI] if they had asked to see'' them. 
Id. at 22. The ALJ thus found that Respondent's ``lack of knowledge of 
his obligations under the law weighs in favor of a finding that [his] 
continued registration is contrary to the public interest.'' Id.
    Finally, the ALJ discussed whether Respondent's prescribing 
practices violated the CSA's requirement that a prescription be 
``issued for a legitimate medical purpose by an individual practitioner 
acting in the usual course of his professional practice.'' Id. at 22 
(quoting 21 CFR 1306.04(a)). The ALJ noted the State Board's findings, 
that with respect to five patients, Respondent had committed `` 
`unprofessional or dishonorable conduct' '' by engaging in `` 
`injudicious prescribing, administering or dispensing of a drug or 
medicine.' '' Id. at 23 (quoting N.M. Stat. Ann. Sec. Sec.  61-6-15(A) 
and 61-6-15(D)(26)). Faulting Respondent for his ``failure to address 
the specific findings pertaining to his prescribing practices of the 
five patients,'' and notwithstanding that this was ``not a central 
issue of the Government's case,'' the ALJ found ``that the Government 
has demonstrated that Respondent has issued prescriptions outside of 
the usual course of professional practice in violation of federal and 
state law.'' Id. at 24. The ALJ thus concluded that factors two and 
four ``weigh heavily in favor of a finding that Respondent's continued 
registration would be inconsistent with the public interest.'' Id.
    Finally, with respect to factor five--such other conduct which may 
threaten public health and safety--the ALJ found that ``Respondent's 
acceptance of responsibility was somewhat mixed, but when considering 
the record as a whole, [he] has failed to demonstrate that he has 
accepted responsibility for [his] past misconduct and that he will not 
engage in future misconduct.'' Id. at 25. The ALJ acknowledged that 
Respondent admitted both that ``he failed to maintain adequate records 
as required by state and federal regulations'' and ``that he retrieved 
medications from patients and sometimes re-dispensed the non-controlled 
medications to other patients.'' Id. However, the ALJ also noted 
Respondent's testimony (which he found incredible) that Respondent had 
``always indicated'' in his charts the medications he had given his 
patients, his testimony that he did not log samples of several 
controlled substances that he received from pharmaceutical company 
representatives because the representatives never told him that the 
drugs were controlled substances, as well as his testimony that ``he 
does not agree with the Medical Board's findings pertaining to his 
prescribing practices.'' Id. at 25-26.
    The ALJ ultimately concluded that the Government had made out a 
prima facie case for revoking Respondent's registration under factors 
one, two, four, and five, and that Respondent had failed to rebut the 
Government's case because he failed ``to accept responsibility for his 
misconduct and demonstrate that he will not engage in future 
misconduct.'' Id. at 26-27. The ALJ thus recommended that Respondent's 
registration be revoked and that any pending application be denied. Id. 
at 27.
    Respondent filed exceptions to the ALJ's R.D. Thereafter, the 
record was forwarded to this Office for Final Agency Action.
    Having considered the record in its entirety, I adopt the ALJ's 
finding that Respondent violated federal law by failing to keep proper 
records of the controlled substances he received, as well as his 
finding that the Government failed to prove that he redistributed the 
controlled substances he received from his patients. However, I reject 
the ALJ's findings that Respondent violated the CSA's prescription 
requirement (21 CFR 1306.04(a)) with respect to the five patients 
listed in the State Board's order because the Government never provided 
notice that it intended to raise the issue of whether the Board's 
findings also establish a violation of federal law.

[[Page 62669]]

Because the issue was never properly raised, the ALJ committed further 
error by requiring Respondent to acknowledge wrongdoing with respect to 
his prescribing to these patients. With respect to the misconduct which 
was fairly at issue, I find that Respondent has accepted 
responsibility. However, I also find his misconduct to be sufficiently 
egregious to warrant a period of outright suspension. In addition, 
based on the restrictions imposed by the State Board on his controlled 
substance prescribing authority, I conclude that federal law requires 
that his DEA registration be similarly restricted. I make the following 
findings of fact.

Findings of Fact

    Respondent is a psychiatrist licensed by the New Mexico Board; as 
of the date of the hearing, he has practiced medicine for thirty-seven 
years, during which he has been the chief of psychiatry or medical 
director of psychiatric services at nearly every hospital in the 
Albuquerque area. Tr. 129-30. In addition, he has received a fellowship 
from the American Psychiatric Association and served as President of 
the New Mexico Psychiatric Association. Id. at 130. Respondent 
testified--without refutation--that he has ``a reputation for treating 
particularly difficult or complex psychiatric conditions.'' Id. at 131.
    On August 9, 2010, the Board issued Respondent a Notice of 
Contemplated Action against his medical license, and on October 1, 
2010, the Board filed an Amended Notice of Contemplated Action and also 
issued a Summary Suspension Order, which suspended his medical license 
pending a hearing which was held on some date not clear on the record.
    On May 9, 2011, the Board issued its Decision and Order. GX 5, at 
1. Therein, the Board found that Respondent committed ``unprofessional 
or dishonorable conduct'' by engaging in ``injudicious prescribing, 
administering, or dispensing of a drug or medicine'' with respect to 
five patients. Id. at 13 (citing N.M. Stat. Sec.  61-6-15(D)(26)). In 
addition, the Board found that Respondent had failed to maintain 
accurate, complete, and legible medical records. Id. (citing N.M. Stat. 
Sec.  61-6-15(D)(33)). Based on these findings, the Board placed 
Respondent on probation. Id.
    Respondent is also the holder of a DEA Certificate of Registration, 
which authorizes him to dispense controlled substances in schedules II 
through V, including narcotic controlled substances, as a practitioner. 
GX 1. In addition, Respondent is authorized to treat up to 100 patients 
for opiate addiction with Suboxone and Subutex under the Drug Addiction 
Treatment Act of 2000, Public Law 106-310, title XXXV, 114 Stat. 122 
(codified at 21 U.S.C. 823(g)(2)). See id. While Respondent's 
registration was due to expire on July 31, 2010, on June 4, 2010, he 
filed a renewal application. Id. at 2. Because Respondent filed a 
timely renewal application, his registration remains in effect pending 
the issuance of this Decision and Order. See 5 U.S.C. 557; 21 CFR 
1301.36(i).

The DEA Investigation

    On August 10, 2009, the New Mexico Board of Pharmacy received 
information from Presbyterian Health Plan Quality Management, a health 
insurer, that a consumer had alleged that Respondent ``was accepting 
medications from patients that had already been dispensed to them'' and 
that he was asking ``patients to return medications to him so that he 
could . . . re-dispense them.'' Tr. 26-27. The matter was assigned to 
one of the Board's SDIs, who contacted the local DEA Office and asked 
if the DIs wanted to accompany him on a visit to Respondent's office. 
Id. at 29. The DIs agreed, and on November 16, 2009, the SDI, 
accompanied by several DIs, went to Respondent's office. Id. at 30.
    Upon their arrival, Respondent agreed to meet with the 
Investigators, and the SDI informed him of the reason for the visit and 
presented him with a Notice of Inspection and a Consent to Audit, which 
Respondent signed. Id. at 31, 65. According to the Investigators, 
Respondent was cooperative during the visit. Id. at 31; see also id. at 
66 (testimony of DI). Respondent admitted that he took back medications 
from patients and stated that he did so ``to prevent patients from 
accumulating medications to prevent any possible self-destructive 
behavior and for compassionate purposes because some of the[ ] 
medications are very expensive.'' Id. at 32-33; see also id. at 67. 
Respondent, however, denied that he was personally taking or diverting 
any of the controlled substances. Id. at 45-46. He also denied that he 
re-dispensed any of the controlled substances he had obtained, and the 
SDI testified that he had no evidence to the contrary. Id. at 46.
    In response to Respondent's explanation of his conduct, the DI 
explained that ``once a prescription is filled for an end-user it's 
outside of the cycle of distribution and [that he could not] obtain 
that from a patient.'' Id. at 67. The DI further told Respondent that 
this was a ``violation of'' federal regulations and that if his concern 
was that his patients could not have large quantities of controlled 
substances because they would engage in ``self-destructive behavior,'' 
he could either ``procure controlled substances himself and then 
dispense smaller quantities . . . that he wanted a patient to have,'' 
or ``he could write more frequent prescriptions for those patients.'' 
Id. at 68. Respondent replied that ``he did not like either of those 
options and . . . that he believed'' that writing multiple 
prescriptions ``would be an insurance nightmare'' for his patients. Id. 
at 69.
    The Investigators then asked to see where Respondent kept the 
medications. Id. at 33-35. Respondent took them to ``a little side 
room'' which had shelves; on the shelves were boxes containing 
prescription vials that were labeled with the names of the pharmacy, 
patient, and drug, as well as dosing instructions. Id. at 33-35. 
According to the SDI, Respondent's name was on more than half of the 
vials, however, he did not determine the respective number of the vials 
which Respondent and other physicians had prescribed. Id. at 35. 
Moreover, the SDI did not recall finding any controlled substances in 
this room. Id. at 34. However, the DI testified that the room contained 
controlled substance samples, id. at 76; the samples were for drugs 
such as Ambien, Lunesta, and Lyrica. Id. at 36.
    The Investigators were also taken to a different room which was 
like an office. Id. at 36, 77. According to the SDI, the drug samples 
were kept in this room and ``were in a cabinet that . . . had the 
ability to be locked,'' but the SDI did not ``recall it being locked 
when [the Investigators] were there.'' Id. at 36-37; but see id. at 76 
(testimony of DI that the samples were located in the other room). 
However, according to the DI, the cabinet was closed and Respondent 
used a key to open it. Id. at 77. The cabinet contained both controlled 
and non-controlled drugs. Id. at 78; see also id. at 37. According to 
the DI, the room had shelving on which both controlled and non-
controlled substances were stored. Id. at 78. The Investigators also 
found nine empty prescription vials on the shelves, id. at 79; three of 
the vials contained labels which indicated that they had once contained 
either Lorazepam or Flurazepam, both of which are schedule IV 
depressants. Id. at 87. The labels on two of the vials indicated that 
the drugs had not been prescribed by Respondent. Id. at 88. However, 
the DI did not ask Respondent if the vials had contained controlled 
substances when he obtained them from his patients and admitted that 
she did

[[Page 62670]]

not know whether the vials contained any controlled substances when he 
took possession of them. Id. at 113-14.
    The Investigators then interviewed Respondent. Id. at 38. The SDI 
asked him if he kept receipt records for the drugs he received from his 
patients; Respondent ``said he did not.'' Id.; see also id. at 80 
(testimony of DI that when she asked Respondent for a log of the 
returned drugs, he did not have one). The SDI then asked Respondent if 
he kept receipt records for the drug samples; Respondent ``said he did 
not keep receipt records or a log.'' Id. at 38; see also id. at 77 
(testimony of DI). Moreover, Respondent did not keep ``any dispensing 
records for the re-dispensed drugs . . . and did not produce any 
[patient] charts that showed that he dispensed these.'' Id. at 38-39. 
Nor did Respondent offer to show the Investigators any patient charts 
which contained dispensing information. Id. at 39. However, on cross-
examination, the SDI did not recall if he had asked Respondent to 
provide the patient charts. Id. at 47. Also, Respondent did not have a 
controlled substance inventory. Id. at 40. Finally, while Respondent 
was providing maintenance and/or detoxification treatment to patients, 
he did not maintain a log of the Suboxone/Subutex that he dispensed to 
his patients, and with the exception of a shipment of Suboxone that 
arrived during the inspection, he did not have invoices for the 
Suboxone/Subutex which he received.\2\ Id. at 70-71, 81; see also GX 8.
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    \2\ While this line of questioning was directed at ``what type 
of records are required to be kept for someone who prescribes, 
administers or dispenses [Suboxone or Subutex] for maintenance or 
detoxification'' purposes, and the DI initially answered that 
Respondent was required to keep dispensing records, she also 
testified that Respondent ``stated he did not keep the invoices of 
the procurement.'' Tr. 70.
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    According to the SDI, during the interview, Respondent stated that 
he was ``unaware'' that Ambien, Lunesta, and Lyrica ``were controlled 
substances.'' Tr. 40. However, according to the DI, she only spoke to 
Respondent about the Lyrica samples, telling him that it was a schedule 
V controlled substance, which he was unaware of. Id. at 80. He also 
said that he was unaware that he was required to keep records of the 
drugs he received and dispensed. Id. at 49. Respondent then promised to 
keep the required records going forward. Id. at 49-50; but see id. at 
121 (testimony of DI that Respondent did not say that he would comply 
with the regulations going forward).\3\ Moreover, Respondent told the 
Investigators that ``he did not redistribute controlled substances.'' 
Id. at 80.
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    \3\ Following the Medical Board's suspension of Respondent's 
medical license, the DI returned to Respondent's office in an 
unsuccessful attempt to obtain the surrender of his DEA 
registration. Tr. 89. She did not, however, inspect any of his 
records to determine whether he was in compliance with state and 
federal record keeping requirements. Id.
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    During cross-examination, the DI acknowledged that she had not 
interviewed any of Respondent's patients. Id. at 102-03. She also 
acknowledged that she did not ask to see any of Respondent's patient 
charts. Id. at 103. However, the DI testified that Respondent had 
initially stated that he did not maintain any documentation of his 
dispensing of controlled substances and did not state that he 
documented the dispensings in the patient records until after being 
told that he was required to document his dispensings. Id. at 104.
    At the conclusion of the visit, the SDI seized all of the non-
controlled drugs that had been returned by Respondent's patients, as 
well as the non-controlled drug samples that were past their expiration 
date; the DEA Investigators seized all of the controlled substances 
except for the drug samples. Id. at 40-41; 82-84; 86-87. The controlled 
substances seized included schedule II drugs such as Fentanyl (5 
patches), Adderall XR (38 capsules), amphetamine (25 tablets), d-
amphetamine 5mg (28 tablets), methadone 10mg (79 tablets), methylin 5mg 
(30 tablets), oxycodone 5mg (26 tablets), oxycodone/apap 5/325mg (20 
tablets), oxycodone 30mg (34 tablets), oxycodone er 40mg (26 tablets), 
OxyContin 80mg (60 tablets), and oxycodone oral suspension 20mg/20ml (3 
bottles). GX 16, at 1-2. The drugs also included the schedule III drugs 
hydrocodone/apap 10/500mg (16 tablets) and Suboxone (267 tablets); the 
schedule IV drugs zolpidem (27 tablets), Provigil (modafinil) (4 
tablets), and nine different benzodiazepines totaling more than 500 
tablets; and finally the schedule V drugs diphenoxylate hcl/atropine 
sulfate (290 tablets) and Lyrica (119 capsules). Moreover, at least 
seven of the vials contained controlled substances which were 
prescribed by other physicians. See GX 10 at 13-14 (pt. SL, prescriber 
Dr. KS, drug oxazepam); id. at 19-22 (pt. DC, prescriber Dr. JL, two 
prescriptions for liquid oxycodone); id. at 23-24 (pt. SA, prescriber 
Dr. AW, drug methylphenidate hcl); id. at 55-56 (pt. DC, prescriber Dr. 
JL, drug methadone hcl); id. at 57-58 (pt. GN, prescriber Dr. ZH, drug 
oxycodone); id. at 87-88 (pt. KC, prescriber Dr. CS, drug triazolam).

Respondent's Evidence

    Respondent testified on his own behalf. Respondent acknowledged 
that he accepted medications from his patients, stating he did so 
because it helped him ``feel more secure about treating patients that 
were potentially dangerous to themselves.'' Tr. 141. He also denied 
``ask[ing] patients to bring in their medications . . . so that [he] 
could redistribute those drugs to other patients.'' Id.
    Regarding the manner in which the drugs were stored, Respondent 
denied that any controlled substances were stored in the cardboard 
boxes. Tr. 142-43. Respondent stated that he kept the controlled 
substances that his patients returned to him because he ``felt bad 
about putting them down the toilet'' and that he kept them ``in a 
locked cabinet,'' id. at 143, which is consistent with the testimony of 
the SDI. He also maintained that he ``never'' re-distributed controlled 
substances to patients \4\ and denied using any of the controlled 
substances that were given to him by his patients. Id.; see also id. at 
149, 152. And on cross-examination, he further denied that he was 
acting as a pharmacy. Id. at 187.
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    \4\ Respondent admitted that ``on very rare occasions,'' he re-
dispensed non-controlled drugs to patients who were ``clearly 
indigent'' and ``needed the medication, either because they were in 
a crisis mode or because they would go through withdrawal 
symptoms.'' Tr. 144. He further denied receiving any payment from 
the patients to whom he provided these drugs. Id. at 145.
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    Respondent admitted that he ``did not keep'' a log of the return 
medications and claimed that he ``did not'' know that he was required 
to do so under state or federal law. Id. at 145. He further testified 
he was no longer accepting either controlled or non-controlled drugs 
from his patients and that he had stopped doing so after the DEA visit. 
Id. at 146. He also testified that he keeps a log of any samples he 
receives from drug companies. Id.
    Respondent testified, however, that he ``always indicated'' in the 
patient charts the medications and amounts that he had given his 
patients. Id. Moreover, Respondent testified that neither the SDI nor 
the DI had asked to see any patient charts and neither had ever 
subpoenaed any of the charts. Id. at 147. He stated that if they had 
asked to review the patient charts, he would have allowed them to do 
so. Id. He further maintained that he documented his dispensing of 
Suboxone in the patient charts and that he would have shown these 
charts to the SDI and DI if they had asked to see them. Id. at 148-49.

[[Page 62671]]

    Regarding whether he knew that various drugs samples were 
controlled substances, Respondent testified that none of the drug 
company representatives ``ever stated that these are controlled 
substances and that logs have to be kept.'' Id. at 154. He further 
testified that representatives for Ambien had ``indoctrinated'' doctors 
that the drug was ``preferable . . . to the benzodiazepine sedatives . 
. . and it was a lower risk kind of medication'' and ``non-addictive.'' 
Id. Respondent thus ``just assumed that they were not . . . controlled 
substances.'' Id. However, Respondent testified that he ``[v]ery 
definitely'' now knows that the drugs are controlled substances. Id. 
Moreover, on cross-examination, Respondent testified that ``[t]here was 
never any mention made by either the drug reps or the drug companies 
that I was supposed to be doing some logging of these medications.'' 
Id. at 182. While maintaining that it was part of the drug companies' 
and their representatives' responsibility to educate him that the drugs 
were controlled substances, Respondent then explained that ``I'm not 
saying that I'm not--shouldn't take some responsibility for it, because 
of course, I do take responsibility for it.'' Id.
    Respondent also testified that in response to the State Medical 
Board's order, he has ``endeavored to do a better job'' of charting. 
Id. at 155-56. Moreover, Respondent stated that he ``believe[s] that he 
has been in compliance with state and federal regulations since the 
November 2009 inspection and will continue to comply in the future. Id. 
at 158. He also stated that he is remorseful for his previous lack of 
compliance. Id. at 159. However, he maintained that notwithstanding his 
thirty-seven years of medical practice, he was unaware that the New 
Mexico Controlled Substances Act imposed mandatory recordkeeping 
requirements for controlled substances.\5\ Id. at 169.
---------------------------------------------------------------------------

    \5\ On cross-examination, the Government asked Respondent ``what 
record keeping requirements'' for controlled substances he was ``now 
familiar with?'' Tr. 179. Respondent answered that he did not know 
what the Government was asking and that ``[t]hat's a pretty broad 
question.'' Id. at 180. The Government then asked: ``What records 
are you keeping for controlled substances at this time?'' Id. 
Respondent replied: ``Are you asking in terms of things that are 
coming from my office or are you talking about in terms of 
prescriptions that patients go to fill? What are you--I'm not 
certain what you're asking?'' Id. The Government responded: ``Well, 
you're the doctor. You would know what you would be prescribing and 
dispensing so you would know what records need to be kept. I can't 
answer your question.'' Id. Respondent replied: ``Well, I'm not 
certain if you're talking about medication that I dispense, or 
medications that I prescribe. Which are you asking?'' Id. The 
Government then stated: ``Records for anything to do with controlled 
substances that you dispense or prescribe.'' Id. Respondent 
answered: ``Well, the initial documentation is in the patient's 
chart and to my knowledge that's all that's required. For 
medications that I would dispense that I had, i.e., samples of 
Ambien or Lunesta, Lyrica, whatever, that I have a log of, in terms 
of the medications that have been received and then as they're 
dispensed.'' Id. at 180-81.
---------------------------------------------------------------------------

    On cross-examination, the Government asked Respondent why the 
Medical Board had suspended his license. Id. at 161. According to 
Respondent, two complaints had been filed against him, one by the wife 
of a patient who was ``going through some conflict with her husband'' 
and complained about his ``treatment of her husband''; the other 
complaint was filed by a mother and daughter who he had expelled from 
his practice. Id. Respondent then stated that during the course of the 
investigation, two of his patients overdosed and thus ``the Board 
understandably was worried and summarily suspended [his] license.'' Id. 
at 161-62.
    Regarding the two patients who overdosed, Respondent testified that 
one of the patients had allegedly attempted suicide, but later 
recounted his statement. Id. at 162. Moreover, Respondent asserted that 
toxicology testing was not performed on the patient. Id. at 190. As for 
the second patient who overdosed, Respondent testified that he believed 
that the patient ``was depressed about a breakup with a girlfriend and 
. . . deliberately took an overdose.'' Id. at 162. However, according 
to Respondent, the medications found in the patient's body were 
``mostly from another physician that he was also getting medications 
from,'' and that this doctor had ``lost his license because of 
medication issues.'' Id. Respondent maintained that this patient did 
not tell him that he was seeing another physician. Id. at 190. 
Moreover, Respondent testified that he ``take[s] [it] seriously when a 
patient is dishonest'' regarding his use of medications. Id. at 191.
    The Government also questioned Respondent as to whether the Medical 
Board's suspension was based in part on his failure to ``conform to 
record keeping that the Board mandated[.]'' Id. at 165. Respondent 
replied that ``[t]he Board does not mandate specific medical record 
keeping to my knowledge, per se. There was a question as to whether . . 
. it was easy to interpret my records or not.'' Id. The Government then 
asked Respondent whether his records were ``legible and easy to 
interpret[.]'' Id. Respondent acknowledged that ``[t]here was some 
difficulty with the size of the records'' because they ``had been 
reduced by the Xeroxing method and my writing is small'' and he used 
``a lot of arrows, ups and downs kind of notations, to indicate changes 
in medications.'' Id. at 165-66. Respondent then admitted that ``at 
some level it was difficult for an individual not familiar with my 
records to interpret them.'' Id. at 166. However, he further testified 
that he had changed his documentation of patients' histories to make it 
``a little bit more understandable'' and ``more of a form rather than 
just written notes,'' and that he had also expanded the level of detail 
in the patients' progress notes. Id. at 192. He also stated that he was 
``trying'' to improve his handwriting. Id. at 193.
    Finally, the Government asked Respondent if the Medical Board's 
prohibition on his being allowed to practice pain management was based 
on his ``over prescribing [of] pain medication.'' Id. at 166. 
Respondent answered that while ``that was their interpretation . . . 
I'm not sure that I agree with that.'' Id. However, Respondent then 
explained that he is ``fully obliged to abide by their decisions and 
their recommendations.'' Id. Moreover, Respondent testified that he was 
no longer dispensing Suboxone and Subutex. Id. at 189.

Discussion

    Section 304(a) of the Controlled Substances Act (CSA) provides that 
a registration to ``dispense a controlled substance . . . may be 
suspended or revoked by the Attorney General upon a finding that the 
registrant . . . has committed such acts as would render his 
registration under section 823 of this title inconsistent with the 
public interest as determined under such section.'' 21 U.S.C. 824(a)(4) 
(emphasis added). With respect to a practitioner, the Act requires the 
consideration of the following factors in making the public interest 
determination:

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The applicant's experience in dispensing . . . controlled 
substances.
    (3) The applicant's conviction record under Federal or State 
laws relating to the manufacture, distribution, or dispensing of 
controlled substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health and 
safety.

Id. Sec.  823(f).

    ``These factors are . . . considered in the disjunctive.'' Robert 
A. Leslie, M.D., 68 FR 15227, 15230 (2003). It is well settled that I 
``may rely on any one or

[[Page 62672]]

a combination of factors[,] and may give each factor the weight [I] 
deem[] appropriate in determining whether a registration should be 
revoked. Id.; see also MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 
2011); Volkman v. DEA, 567 F.3d 215, 222 (6th Cir. 2009); Hoxie v. DEA, 
419 F.3d 477, 482 (6th Cir. 2005). Moreover, while I am required to 
consider each of the factors, I ``need not make explicit findings as to 
each one.'' MacKay, 664 F.3d at 816 (quoting Volkman, 567 F.3d at 222 
(quoting Hoxie, 419 F.3d at 482)).\6\
---------------------------------------------------------------------------

    \6\ ``In short, this is not a contest in which score is kept; 
the Agency is not required to mechanically count up the factors and 
determine how many favor the Government and how many favor the 
registrant. Rather, it is an inquiry which focuses on protecting the 
public interest; what matters is the seriousness of the registrant's 
misconduct.'' Jayam Krishna-Iyer, 74 FR 459, 462 (2009). 
Accordingly, as the Tenth Circuit has recognized, findings under a 
single factor can support the revocation of a registration. MacKay, 
664 F.3d at 821.
---------------------------------------------------------------------------

    The Government has the burden of proving, by a preponderance of the 
evidence, that the requirements for revocation or suspension pursuant 
to 21 U.S.C. 824(a) are met. 21 CFR 1301.44(e). However, ``once the 
[G]overnment establishes a prima facie case showing a practitioner has 
committed acts which render his registration inconsistent with the 
public interest, the burden shifts to the practitioner to show why his 
continued registration would be consistent with the public interest.'' 
MacKay, 664 F.3d at 817 (citing Medicine Shoppe-Jonesborough, 73 FR 
364, 387 (2008) (citing cases)).

Factor One--The Recommendation of the State Licensing Board

    The evidence shows that the New Mexico Medical Board has not made a 
recommendation in this matter. However, because the Controlled 
Substances Act makes the possession of authority under state law to 
dispense controlled substances a requirement for both obtaining and 
maintaining a practitioner's registration, see 21 U.S.C. 802(21) & 
823(f), DEA has interpreted factor one more broadly and thus considers 
disciplinary actions taken by a state board as relevant in the public 
interest determination when they result in a loss of state authority, 
or are based on findings establishing that a registrant diverted 
controlled substances (whether acting intentionally, recklessly or 
merely negligently), failed to maintain effective controls against 
diversion, or otherwise failed to comply with laws and/or regulations 
related to controlled substances.
    Here, the evidence shows that on October 1, 2010, the New Mexico 
Board of Medicine summarily suspended Respondent's state medical 
license. GX 4. The evidence also shows that on May 9, 2011, the Board, 
following a hearing, found that Respondent committed ``unprofessional 
or dishonorable conduct'' in that he engaged in the ``injudicious 
prescribing of drugs'' and ``fail[ed] to maintain timely, accurate, 
legible and complete medical records.'' GX 5, at 13.
    Notwithstanding these findings, the Board re-instated Respondent's 
medical license to allow him to practice psychiatry. Id. However, the 
Board prohibited him from practicing pain management and from 
prescribing ``narcotics, including but not limited to, all opioid 
analgesics, including buprenorphine and all synthetic opioid 
analgesics.'' Id.
    Under the CSA, a practitioner's registration grants authority to 
dispense a controlled substance, which by definition ``means to deliver 
a controlled substance to an ultimate user . . . by, or pursuant to the 
lawful order of, a practitioner.'' 21 U.S.C. 802(10) (emphasis added). 
Likewise, the CSA defines the ``[t]he term `practitioner' [to] mean[] a 
physician . . . licensed, registered, or otherwise permitted, by . . . 
the jurisdiction in which he practices . . . to distribute, dispense, 
[or] administer . . . a controlled substance in the course of 
professional practice.'' Id. Sec.  802(21). Finally, as stated above, 
under the CSA, a practitioner's possession of federal authority to 
dispense controlled substances is premised on his possession of 
authority under state law to do so. See also id. Sec.  823(f) (``The 
Attorney General shall register practitioners . . . if the applicant is 
authorized to dispense . . . controlled substances under the laws of 
the State in which he practices.''). Thus, to the extent a practitioner 
is not authorized under state law to dispense certain categories or 
schedules of controlled substances, he can no longer lawfully dispense 
them under federal law. Accordingly, where a state board takes such 
action, at a minimum, a practitioner's CSA registration must be limited 
to authorize the dispensing of only those controlled substances, which 
he can lawfully dispense under state law.

Factors Two and Four--Respondent's Experience In Dispensing Controlled 
Substances and Compliance With Applicable Laws Related to Controlled 
Substances

    With respect to these factors, the ALJ rejected, as unsupported by 
substantial evidence, the Government's contentions that: (1) Respondent 
acted as a pharmacy without being registered to do so; and (2) he re-
dispensed the controlled substances he obtained from his patients. ALJ 
at 18-19. The ALJ found, however, that Respondent violated various 
federal and state controlled substance recordkeeping requirements by 
failing to: (1) Take inventories of the drugs he had on hand and keep a 
record of such, (2) maintain records of the drugs he received, and (3) 
document his dispensings of controlled substances. Id. at 19-22. 
Moreover, based on the Medical Board's Decision and Order, which found 
that Respondent had engaged in ``injudicious prescribing . . . of a 
drug,'' id. at 23, the ALJ further found ``that the Government has 
demonstrated that Respondent has issued prescriptions outside of the 
usual course of professional practice in violation of federal and state 
law.'' Id. at 24. I adopt the ALJ's conclusion that the Government has 
not proved that Respondent either acted as an unregistered pharmacy or 
re-dispensed controlled substances, as well as his conclusion that he 
violated various recordkeeping requirements. However, I reject his 
conclusion that Respondent violated federal law by issuing 
prescriptions outside of the usual course of professional practice.

The Allegations of Acting as an Unregistered Pharmacy and Re-Dispensing 
Controlled Substances

    As noted above, in its Prehearing Statement, the Government alleged 
that Respondent ``ask[ed] his patients to return their unused drugs, 
which included controlled substances, and that Respondent would re-
distribute these drugs to his other patients as samples.'' ALJ Ex. 11, 
at 3. Yet the SDI, who was a witness for the Government, testified that 
while Respondent acknowledged that he took back both controlled and 
non-controlled drugs from his patients, he denied that he ever re-
dispensed any controlled substances to his patients. Tr. 46, 80. 
Respondent likewise denied having ever re-dispensed controlled 
substances to his patients. Id. at 143. Moreover, the SDI acknowledged 
that he had no evidence to refute Respondent's statement. Id. at 46. 
The ALJ thus found credible Respondent's denial of the allegation that 
he re-dispensed controlled substances.\7\ R.D. at 12.
---------------------------------------------------------------------------

    \7\ Respondent also denied that he was personally using the 
controlled substances. Here again, there is absolutely no evidence 
to refute his testimony.
---------------------------------------------------------------------------

    The Government nonetheless argues that the empty prescription 
vials, three of which bore labels indicating they had

[[Page 62673]]

previously held controlled substances, ``shows that the controlled 
substances were re-dispensed to his patients because there is no 
reasonable, practical, or valid explanation as to why anyone would take 
back empty medication vials.'' Gov. Br. 26. The Government, however, 
offered no proof that the vials contained controlled substances at the 
time Respondent acquired possession of them. In short, the Government's 
evidence merely creates a suspicion that the vials contained controlled 
substances, which were subsequently re-dispensed. As such, the 
Government's evidence does not constitute substantial evidence and is 
manifestly insufficient to support rejecting the ALJ's finding. See 
NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 300 (1939). 
This conclusion likewise puts to rest the Government's contention that 
Respondent acted as an unregistered pharmacy.
    The Government further argues that Respondent illegally possessed 
the controlled substances that were ``returned . . . from his 
patients.'' Gov. Br. 21. On point here, the CSA provides that ``[i]t 
shall be unlawful for any person knowingly or intentionally to possess 
a controlled substance unless such substance was obtained directly, or 
pursuant to a valid prescription or order, from a practitioner, while 
acting in the course of his professional practice, or except as 
otherwise authorized by this subchapter.'' 21 U.S.C. 844(a). The CSA 
created a closed system of distribution which generally contemplates 
that a controlled substance can only be lawfully acquired from a 
registrant; in the case of a practitioner, the Act generally allows a 
registered practitioner to obtain a controlled substance only from a 
registrant who is authorized to distribute a controlled substance. 
Moreover, while an Agency regulation provides that ``[a]ny person 
lawfully in possession of a controlled substance listed in any schedule 
may distribute (without being registered to distribute) that substance 
to the person from whom he/she obtained it[,]'' 21 CFR 1307.12(a), this 
regulation does not authorize a practitioner to acquire a controlled 
substance which has been dispensed to his patient by another 
practitioner. Nor, by its plain language, does the regulation even 
allow a practitioner to acquire a controlled substance which the 
practitioner dispensed through his own prescription.
    The record contains evidence of at least seven instances in which 
Respondent obtained possession of controlled substances which had been 
prescribed by another physician. See GX 10, at 13-14 (pt. SL, 
prescriber Dr. KS, drug oxazepam); id. at 19-22 (pt. DC, prescriber Dr. 
JL, two prescriptions for liquid oxycodone); id. at 23-24 (pt. SA, 
prescriber Dr. AW, drug methylphenidate hcl); id. at 55-56 (pt. DC, 
prescriber Dr. JL, drug methadone hcl); id. at 57-58 (pt. GN, 
prescriber Dr. ZH, drug oxycodone); id. at 87-88 (pt. KC, prescriber 
Dr. CS, drug triazolam). This evidence is sufficient to establish that 
Respondent unlawfully possessed controlled substances. 21 U.S.C. 
844(a).

The Allegations That Respondent Failed To Maintain Required Records

    The evidence further shows that Respondent violated numerous 
recordkeeping requirements. Indeed, notwithstanding that he has been 
practicing medicine for nearly four decades and a DEA registrant for 
much (if not all) of this time, see GX 1, at 2, Tr. 129; Respondent 
testified that he was unaware of the various recordkeeping requirements 
imposed by both the CSA and New Mexico law. Tr. 169.
    Under the CSA, Respondent was required to take an initial inventory 
of the controlled substances he had on hand ``as soon'' as he ``first 
engage[d]'' in the dispensing of controlled substances, and ``every 
second year thereafter, make a complete and accurate record of all 
stocks thereof on hand.'' 21 U.S.C. 827(a)(1). Respondent was also 
required to ``maintain, on a current basis, a complete and accurate 
record of each such substance . . . received, sold delivered, or 
otherwise disposed of by him.'' Id. Sec.  827(a)(3).
    Respondent did not, however, have an inventory of the controlled 
substances he had on hand at the time of the November 2009 inspection. 
Nor did he maintain a record of the controlled substances he received 
from either his patients or from the manufacturers/distributors who 
provided him with samples. He also did not have a dispensing log for 
the controlled substance samples he dispensed to his patients.
    Finally, Respondent was required to maintain a record of his 
prescribing of controlled substances ``in the course of maintenance or 
detoxification treatment of an individual.'' Id. Sec.  827(c)(1)(A); 21 
CFR 1304.03(c). While Respondent was providing maintenance and/or 
detoxification treatment to patients, he did not maintain a log of the 
Suboxone/Subutex he dispensed to them. Tr. 70-73. Rather, Respondent 
testified that he documented his dispensing of these drugs in the 
patient records and neither the SDI nor the DI testified that they 
asked to see his charts. Id. at 47, 103. However, here again, with the 
exception of a single patient who was obtaining Suboxone through a 
patient assistance program which shipped the drug to Respondent, the 
Government did not establish that Respondent was engaged in the direct 
dispensing of Suboxone/Subutex.
    As his basis for finding Respondent's testimony not credible, the 
ALJ cited testimony to the effect ``that Respondent never provided the 
patient charts'' to the Investigators and that he claimed that he 
documented the dispensing in the charts only after being informed 
``that he was in violation of the federal regulations.'' R.D. at 21. 
The ALJ thus reasoned that ``[t]he delayed timing of Respondent's 
uncorroborated revelation that all his record-keeping was located in 
patient charts is plainly incredible, particularly given other credible 
testimony of record that Respondent was unaware of any record-keeping 
requirements for controlled substances for over thirty-five years.'' 
Id. at 21-22.
    Respondent's lack of awareness of controlled substance 
recordkeeping requirements aside, I reject the ALJ's finding because 
physicians routinely document the prescriptions they write in their 
patient charts. As for ``[t]he delayed timing'' of his response, id. at 
21, the ALJ ignored that where a physician merely prescribes Suboxone, 
DEA regulations only require that a record of the prescription be kept 
and do not mandate what form it must be in. Accordingly, a physician 
can comply with federal law by: (1) Keeping a copy of the prescription, 
(2) keeping a logbook of the prescriptions he issued, or (3) by noting 
the prescription in the patient's chart. Thus, that Respondent did not 
immediately explain that he was documenting the prescriptions in the 
patient chart (whether by making a copy of it or noting it), can easily 
be explained by the fact that he did not understand how he could 
demonstrate his compliance with the regulation. His lack of 
understanding does not, however, establish that he was not in 
compliance.
    As for the ALJ's observation that Respondent ``never provided the 
patient charts,'' id., neither of the Government's witnesses 
conclusively testified that they actually asked for them. Tr. 47 (SDI's 
testimony that he did not recall if he had asked Respondent to provide 
the charts); id. at 103 (DI's testimony that she did not ask to see any 
of the charts). And ultimately, it is the Government which bore the 
burden of proving Respondent's non-compliance and not Respondent's to 
prove he was compliant.

[[Page 62674]]

    Accordingly, I reject this allegation as unsupported by substantial 
evidence. However, as explained above, I do find that Respondent 
violated the CSA and DEA regulations by: (1) Failing to maintain the 
required inventories, (2) failing to retain records of the controlled 
substances he received from both patients and the drug samples he 
received from distributors/manufacturers, and (3) failing to document 
his dispensing of controlled substance samples.

The ALJ's Findings That Respondent Violated 21 CFR 1306.04(a)

    As explained above, the State Board made extensive findings 
regarding Respondent's prescribing of controlled substances to five 
patients, and concluded that he had engaged in the ``injudicious 
prescribing of drugs'' and thus committed ``unprofessional or 
dishonorable conduct.'' GX 5, at 13 (citing N.M. Stat. Ann. Sec.  61-6-
15(D)(26)). Based on these findings, and notwithstanding his 
acknowledgment that this was ``not a central issue of the Government's 
case,'' the ALJ found that Respondent ``issued prescriptions outside of 
the usual course of professional practice in violation of federal and 
state law.'' R.D. at 24; see also id. at 22 (quoting 21 CFR 
1306.04(a)). I reject the ALJ's finding.
    It is certainly true--if not an understatement--to say that 
Respondents' prescribing to the five patients was ``not a central issue 
of the Government's case.'' Indeed, the Government never properly put 
this conduct in issue at all. As explained above, following the remand, 
and notwithstanding its representation that it intended to file an 
amended show cause order, the Government did not do so. And while it is 
settled (and has been upheld by various federal courts of appeals) that 
Due Process is satisfied provided the Government, through its 
prehearing statements, provides adequate notice that it intends to 
litigate an issue, at no point in its pleadings did the Government 
state that it was alleging that Respondent violated 21 CFR 1306.04(a) 
and intended to use the State Board's order as proof. Rather, in its 
prehearing statements, the Government merely stated that it intended to 
put on evidence that the Board had restricted his state authority to 
handle controlled substances and that his DEA ``registration is not a 
restricted registration and includes the authority to handle all 
controlled substances in Schedules II through V which is different from 
and inconsistent with the Respondent's limited/restricted state 
authority to handle controlled substances.'' ALJ Ex. 11, at 6; see also 
id. at 9 (noting Respondent would testify that ``he is currently on an 
indefinite term of probation with the Board'' and ``that he is not 
authorized by the State of New Mexico to handle all controlled 
substances in Schedules II through V'').
    Moreover, even in its post-hearing brief, the Government never 
argued that Respondent's prescribing to the five patients identified in 
the Board's Order establishes that he violated 21 CFR 1306.04(a), which 
prohibits the issuance of prescriptions without a legitimate medical 
purpose and outside of the usual course of professional practice. See 
Gov. Br. 21-32. Indeed, the only reference to the Board's findings 
contained in the Government's brief is the statement that ``[t]he 
Board's findings of fact and disciplinary actions are included in 
Government exhibits two, three, four, five, and eleven . . . and show 
the history of discipline imposed on [Respondent] by the Board.'' Id. 
at 19-20.
    In its brief, the Government also notes Respondent's testimony, in 
which he referred to the State Board's suspension as his 
``sabbatical,'' to argue that he ``accepts no responsibility whatsoever 
for his bad medical practices because he believes that the state 
suspension of his medical license is a sabbatical as opposed to a 
mandatory suspension that was imposed . . . because of his bad medical 
practices.'' Id. at 20. However, here again, the Government does not 
argue that Respondent's ``bad medical practices'' also constituted 
violations of 21 CFR 1306.04(a). Thus, there is also no basis to 
conclude that the issue was litigated by consent.\8\ See CBS Wholesale 
Distributors, 74 FR 36746, 36750 (2009) (``where the Government's case 
`focus[es] on another issue and [the] evidence of [an] uncharged 
violation [is] ``at most incidental,'' ' the Government has not 
satisfied its constitutional obligation to provide a full and fair 
opportunity to litigate the issue and it cannot rely on the incidental 
issue as a basis for imposing a sanction'') (quoting Pergament United 
Sales, Inc., v. NLRB, 920 F.2d 130, 136 (2d Cir. 1990) (quoting NLRB v. 
Majestic Weaving Co., 355 F.2d 854, 861-62 (2d Cir. 1966))). See also 
Yellow Freight System, Inc., v. Martin, 954 F.2d 353, 358 (6th Cir. 
1992) (``An agency may not base its decision upon an issue the parties 
tried inadvertently. Implied consent is not established merely because 
one party introduced evidence relevant to an unpleaded issue and the 
opposing party failed to object to its introduction. It must appear 
that the parties understood the evidence to be aimed at the unpleaded 
issue.'') (citation omitted). In short, given that the Government 
neither alleged, nor argued that Respondent's prescribing to the five 
patients identified in the Board's order violated 21 CFR 1306.04(a), 
the ALJ erred in holding that he violated the regulation.\9\
---------------------------------------------------------------------------

    \8\ It is acknowledged that during her cross-examination of the 
SDI, Respondent's counsel asked him whether he had any evidence that 
Respondent had harmed or injured any of his patients or diverted 
drugs. See Tr. 45-46. However, the questions posed by Respondent's 
counsel to the SDI were directed at the allegations that gave rise 
to the Pharmacy Board's (and not the Medical Board's) investigation 
and the evidence the SDI obtained in the course of the former's 
investigation. See id.
     Subsequently, after the SDI testified in essence that he had no 
knowledge as to whether the Medical Board investigated Respondent 
because he had harmed patients or diverted medications, the 
Government moved into evidence various board orders, arguing that 
they were relevant because they address ``the issue that counsel 
brought up with [the SDI], were any patients harmed, were any 
patients injured, was there any diversion,'' and ``[t]his 
specifically goes to [Respondent's] activities along those lines and 
has become relevant through [the] questioning'' of the SDI. Tr. 92. 
Not only did Respondent's counsel object to the admission of most of 
these exhibits, I conclude that because her questioning of the SDI 
was limited to asking him about the basis for the Pharmacy Board's 
investigation and its findings, this did not make the Medical 
Board's findings relevant and does not excuse the Government from 
its obligation to provide notice. And I further conclude that the 
limited questioning undertaken by Respondent's counsel on these 
issues does not establish that Respondent consented to litigate the 
issue of whether the Medical Board's findings establish that he 
violated 21 CFR 1306.04(a).
    \9\ Even if the Government had properly raised the allegation, I 
would nonetheless reject the ALJ's conclusion. While a violation of 
the standards of professional practice may constitute evidence that 
a practitioner has also acted outside of the usual course of 
professional practice and lacked a legitimate medical purpose in 
prescribing a controlled substance, the federal courts have made 
clear that proof of intentional or knowing diversion requires more 
than proof that a practitioner committed civil negligence. See 
United States v. McIver, 470 F.3d 550, 559 (4th Cir. 2006) (quoted 
in Laurence T. McKinney, 73 FR 43260, 43266 (2008) (the offense of 
unlawful distribution requires proof that the practitioner's conduct 
went `` `beyond the bounds of any legitimate medical practice, 
including that which would constitute civil negligence' '')); see 
also McIver, 470 F.3d at 559 (``the scope of unlawful conduct under 
[21 U.S.C.] 841(a)(1) [requires proof that a physician] used his 
authority to prescribe controlled substances . . . not for treatment 
of a patient, but for the purpose of assisting another in the 
maintenance of a drug habit or some other illegitimate purposes, 
such as his own personal profit''); United States v. Feingold, 454 
F.3d 1001, 1010 (9th Cir. 2006) (``[T]he Moore Court based its 
decision not merely on the fact that the doctor had committed 
malpractice, or even intentional malpractice, but rather on the fact 
that his actions completely betrayed any semblance of legitimate 
medical treatment.'').
    Here, while the State Board found that Respondent had engaged in 
the ``injudicious prescribing'' of drugs and thus committed 
``unprofessional or dishonorable conduct'' in violation of N.M. 
Stat. Ann. Sec.  61-6-15(D)(26), notably, the Board did not find 
that Respondent had engaged in ``the prescribing, administering or 
dispensing of narcotic, stimulant or hypnotic drugs for other than 
accepted therapeutic purposes.'' N.M. Stat. Ann. Sec.  61-6-
15(D)(17). Given the existence of the latter standard, it is clear 
that the State's ``injudicious prescribing'' standard is not 
equivalent to the standard imposed under 21 CFR 1306.04(a). 
Accordingly, the State Board's ultimate finding does not support the 
ALJ's conclusion that Respondent violated the CSA's prescription 
requirement.
     While it may be that the State Board's findings establish 
reckless or negligent conduct in the handling of controlled 
substances, which is a basis to revoke a registration under Agency 
precedent, see Paul J. Caragine, 63 FR 51592, 51601 (1998); here 
again, the Government made no such allegation. The conduct therefore 
cannot support the ALJ's proposed sanction.

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[[Page 62675]]

Summary of Factors Two and Four

    As explained above, I find that Respondent unlawfully possessed 
controlled substances which he obtained from his patients. I also find 
that Respondent failed to maintain required records. I thus conclude 
that the Government has satisfied its prima facie burden of showing 
that Respondent has committed acts that render his registration 
inconsistent with the public interest. 21 U.S.C. 824(a)(4).

Sanction

    Where the Government has met its prima facie burden of showing that 
a registrant has committed acts which render his registration 
inconsistent with the public interest, the burden then shifts to the 
applicant to ``present sufficient mitigating evidence'' to show why he 
can be entrusted with a registration. Medicine Shoppe-Jonesborough, 73 
FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 23848, 23853 
(2007) (quoting Leo R. Miller, 53 FR 21931, 21932 (1988))). ``Moreover, 
because `past performance is the best predictor of future performance,' 
ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), [DEA] has 
repeatedly held that where a registrant has committed acts inconsistent 
with the public interest, the registrant must accept responsibility for 
[his] actions and demonstrate that [he] will not engage in future 
misconduct.'' Medicine Shoppe, 73 FR at 387; see also Jackson, 72 FR at 
23853; John H. Kennedy, 71 FR 35705, 35709 (2006); Cuong Tron Tran, 63 
FR 64280, 64283 (1998); Prince George Daniels, 60 FR 62884, 62887 
(1995); Hoxie v. DEA, 419 F.3d at 483 (``admitting fault'' is 
``properly consider[ed]'' by DEA to be an ``important factor[]'' in the 
public interest determination).
    Here, although the ALJ noted that ``Respondent's acceptance of 
responsibility was somewhat mixed,'' he nonetheless concluded that 
``when considering the record as a whole, [he] has failed to 
demonstrate that he will not engage in future misconduct.'' R.D. at 25. 
I reject the ALJ's conclusion because contrary to his statement, he did 
not consider the record as a whole, but rather, ignored relevant 
evidence to the contrary. And he further erred when he required 
Respondent to accept responsibility for conduct which the Government 
never properly put at issue.
    For example, with respect to the recordkeeping violations, the ALJ 
noted that Respondent admitted that he had failed to keep required 
records. Id. (citing Tr. 169). However, the ALJ apparently concluded 
that Respondent had not provided adequate assurance that he would 
comply in the future, noting that when asked by the Government to state 
what recordkeeping requirements he was now familiar with ``for anything 
to do with controlled substances that you dispense or prescribe,'' he 
answered: ``[t]he initial document is in the patient's chart and to my 
knowledge that all that's required.'' Id. (quoting Tr. 180). The ALJ, 
however, ignored the rest of Respondent's answer to this question: 
``For medications that I would dispense that I had, i.e., samples of 
Ambien or Lunesta, Lyrica, whatever, that I have a log of, in terms of 
the medications that have been received and then as they're 
dispensed.'' Tr. 180-81. Respondent thus acknowledged his obligation to 
keep a record of his dispensings.
    Moreover, the ALJ entirely ignored Respondent's testimony that 
following the November 2009 inspection he had stopped accepting drugs 
from his patients. See Tr. 146. The ALJ also ignored Respondent's 
testimony that he was now keeping a log of any samples he received from 
drug companies. See id.
    Next, although it is not clearly stated in his recommended 
decision, the ALJ apparently found that Respondent lacked candor, based 
on his finding not credible, Respondent's testimony that he documented 
the medications he was providing his patients in their charts. R.D. at 
25. Because for reasons explained above, I reject the ALJ's credibility 
finding, I conclude that his testimony on this issue does not establish 
that he lacks candor.
    The ALJ then noted that ``Respondent also admitted that he was 
unaware that Ambien, Lunesta and Lyrica are controlled substances, but 
appeared to blame the pharmaceutical companies for failing to inform 
him.'' Id. (citing Tr. 181-82). While this aspect of Respondent's 
testimony--which he offered to justify his failure to maintain the 
records for these drugs--does not impress, the ALJ once again ignored 
the rest of his testimony, in which he stated: ``I'm not saying that I 
. . . shouldn't take some responsibility for it, because of course, I 
do take responsibility for it.'' Id. at 182 (emphasis added). Moreover, 
it is undisputed that following the November 2009 inspection, 
Respondent commenced maintaining a log of the controlled substances he 
received.
    Finally, the ALJ cited Respondent's testimony regarding the Medical 
Board's findings, including his testimony to the effect that while he 
acknowledges his obligation to comply with the Board's order, ``he does 
not agree with the Medical Board's findings pertaining to his 
prescribing practices.'' R.D. at 26 (citing Tr. 166). However, because 
as explained above, the Government failed to raise the issue, 
Respondent was not obligated to address it in the proceeding.
    As for what was properly at issue in the proceeding, Respondent has 
substantially complied with the requirement that he accept 
responsibility for his misconduct and demonstrate that he will not 
engage in future misconduct. However, even where a registrant satisfies 
this obligation, in fashioning an appropriate sanction, the Agency is 
still entitled to consider the egregiousness of the proven misconduct 
and its deterrence interests. See Joseph Gaudio, 74 FR 10083, 10095 
(2009); see also Paul Weir Battershell, 76 FR 44359, 44368-69 (2011); 
Roni Dreszer, 76 FR 19434, 19435 (2011); Mark DeLalama, 76 FR 20011, 
20020 (2011); Janet L. Thornton, 73 FR 50354, 50356 (2008).
    Given the unrefuted evidence that he acted out of a benign 
motivation, I place little weight on Respondent's unlawful conduct in 
obtaining possession of the controlled substances from his patients. 
Respondent's recordkeeping violations are, however, a different matter. 
Indeed, I find it remarkable--and inexcusable--that Respondent was 
unaware of both the CSA's and the State's recordkeeping requirements. 
``Recordkeeping is one of the CSA's central features'' for maintaining 
accountability of the distribution and dispensing of controlled 
substances; ``a registrant's accurate and diligent adherence to this 
obligation is absolutely essential to protect against the diversion of 
controlled substances.'' Paul H. Volkman, 73 FR 30630, 30644 (2008).
    It should be obvious to anyone that the lawful handling of 
controlled substances is a highly regulated activity, and having 
voluntarily chosen to become a registrant, Respondent cannot reasonably 
claim ignorance of the legal requirements applicable to his controlled 
substance activities. See United States v. Southern Union Co.,

[[Page 62676]]

630 F.3d 17, 31 (1st Cir. 2010). The recordkeeping requirements at 
issue here have been part of federal law since the enactment of the CSA 
in 1971. Surely, at some point during the thirty-seven years of his 
medical career, and preferably before he first started handling 
controlled substances, Respondent should have familiarized himself with 
the CSA and DEA regulations.
    By themselves, recordkeeping violations can support the revocation 
of a registration. See Volkman, 73 FR at 30644. Here, however, the 
scope of the proven violations is limited, given that there is no 
evidence that he dispensed any of the controlled substances he obtained 
from his patients and that the other evidence in the case suggests that 
his dispensing activity was limited in scope. So too, while Respondent 
did not maintain an inventory of the controlled substances he had on 
hand, the quantities found during the inspection were limited. I thus 
conclude that Respondent's recordkeeping violations do not warrant 
revocation but are nonetheless sufficiently egregious to warrant the 
suspension of his registration.
    Moreover, pursuant to the Medical Board's order, Respondent no 
longer holds authority under state law to prescribe ``narcotics, 
including but not limited to, all opioid analgesics, including 
buprenorphine and all synthetic opioid analgesics.'' GX 5, at 13. As 
explained in the discussion of factor one, under the CSA, the Board's 
revocation of his authority to prescribe these drugs likewise mandates 
that the same restriction be imposed on his DEA registration. 
Therefore, his registration will be restricted to bar him from 
prescribing the aforementioned drugs and his Identification Number as a 
DATA-Waiver physician must also be revoked.
    Accordingly, I will order that Respondent's application to renew 
his new registration be granted subject to the following conditions:
    (1) Effective on the date on which Respondent's registration is 
renewed, his registration shall be suspended for period of six months.
    (2) Respondent's registration shall be restricted to authorize the 
dispensing of only non-narcotic controlled substances.
    (3) Respondent's Identification Number as a DATA-Waiver physician 
shall be revoked.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
824(a)(4), as well as 28 CFR 0.100(b), I order that the application of 
Kenneth Harold Bull, M.D., to renew his DEA Certificate of Registration 
as a practitioner be, and it hereby is, granted subject to the 
condition that he be authorized to dispense only non-narcotic 
controlled substances. I also order that the Identification Number as a 
DATA-Waiver physician issued to Kenneth Harold Bull, M.D., be, and it 
hereby is, revoked. I further order that upon the effective date of 
this Order, the DEA Certificate of Registration issued to Kenneth 
Harold Bull, M.D., be, and it hereby is, suspended for a period of six 
months. This Order is effective November 21, 2013.

    Dated: September 22, 2013.
Michele M. Leonhart,
Administrator.
[FR Doc. 2013-24695 Filed 10-21-13; 8:45 am]
BILLING CODE 4410-09-P